At the national level, housing affordability is up from last month but down from a year ago. Mortgage rates rose to 4.78 percent this August, up 14.1 percent compared to 4.19 percent a year ago.

• Housing affordability declined from a year ago in August moving the index down 8.3 percent from 153.9 to 141.2. The median sales price for a single family home sold in August in the US was $267,300 up 4.9 percent from a year ago.
• Nationally, mortgage rates were up 59 basis point from one year ago (one percentage point equals 100 basis points).

• The payment as a percentage of income was down to 17.7 percent this August but up from 16.2 percent from a year ago. Regionally, the West has the highest payment at 24 percent of income. The South had the second highest payment at 17 percent followed by the Northeast at 16.5 percent. The Midwest had the lowest payment as a percentage of income at 14.2 percent.

• Regionally, the West recorded the biggest increase in home prices at 5.2 percent. The Midwest had an increase of 4.2 percent while the South had a gain of 3.6 percent. The Northeast had the smallest growth in price of 0.1 percent.
• Regionally, all four regions saw a decline in affordability from a year ago. The Midwest had the biggest drop in affordability of 7.8 percent. The West had a decline of 7.7 percent followed by the South that fell 7.0 percent. The Northeast had the smallest drop of 5.5 percent.
• On a monthly basis, affordability is up from last month in three of the four regions. The Northeast had biggest gain of 6.2 percent. The South had an incline of 2.4 percent followed by the West with a slight increase of 0.1 percent. The Midwest had the only dip in affordability of 4.8 percent.
• Despite month-to-month changes, the most affordable region was the Midwest, with an index value of 175.7. The least affordable region remained the West where the index was 101.2. For comparison, the index was 146.7 in the South, and 151.2 in the Northeast.

• Mortgage applications are currently down. Mortgage rates are still rising along with rents. Foot traffic is up which shows there is interest from future homebuyers. Job creation remains steady and new homes sales are continuing to incline. Home prices are up 4.9 percent outpacing median family incomes that are growing 3.0 percent.
• What does housing affordability look like in your market? View the full data release here.
• The Housing Affordability Index calculation assumes a 20 percent down payment and a 25 percent qualifying ratio (principal and interest payment to income). See further details on the methodology and assumptions behind the calculation here.

Source: NAR Economic Outlook

In a monthly survey of REALTORS®, respondents reported that properties were typically on the market for 29 days, just a day shorter time compared to one year ago (30 days), according to the  August 2018 REALTORS® Confidence Index Survey.[1] This indicates that in many states, the supply of homes for sale is still inadequate compared to the demand for homes. However, the difference in median days in the current month compared to the same month last year has started to narrow as homebuying demand has eased and the inventory of homes for sale has slightly increased. In January and February of this year, properties were selling about one week less compared to the length of time in the same period one year ago.

During the June–August 2018, properties typically sold within one month in 32 states and in the District of Columbia. Properties sold most quickly in the states of South Dakota (19 days), Washington (20 days), Colorado (21 days), Utah (21 days), Ohio (21 days), Idaho (22 days), Massachusetts (21 days), and Rhode Island (21 days).

 

Based on listing time on Realtor.com[2], properties sold more quickly in 385 out of 500 metro areas (77 percent)—still most of metro areas, but fewer than the number of metro areas that had year-on-year faster selling time in August 2017 (405 metros). Compared to the median days on market one year ago, properties sold more quickly in August 2018 even in the high-price areas of San Jose-Sunnyvale-Sta. Clara, San Francisco-Hayward, and San Diego-Carlsbad.

 

Scroll down the list of metro areas in the interactive table below or hover over the map to view the median number days properties were listed on Realtor.com in July 2018 and one year ago.

 

var divElement = document.getElementById('viz1538599628673'); var vizElement = divElement.getElementsByTagName('object')[0]; if ( divElement.offsetWidth > 800 ) { vizElement.style.width='560px';vizElement.style.height='1307px';} else if ( divElement.offsetWidth > 500 ) { vizElement.style.width='560px';vizElement.style.height='1307px';} else { vizElement.style.width='560px';vizElement.style.height='1307px';} var scriptElement = document.createElement('script'); scriptElement.src = 'https://public.tableau.com/javascripts/api/viz_v1.js'; vizElement.parentNode.insertBefore(scriptElement, vizElement);

---

About the Realtors® Confidence Index Survey

 

The RCI Survey gathers information from REALTORS® about local market conditions based on their client interactions and the characteristics of their most recent sales for the month. The August 2018 survey was sent to 50,000 REALTORS® who were selected from NAR’s1.3 million members through simple random sampling and to 8,386 respondents in the previous three surveys who provided their email addresses. There were 4,639 respondents to the online survey which ran from September 1-11, 2018. NAR weights the responses by a factor that aligns the sample distribution of responses to the distribution of NAR membership. The REALTORS® Confidence Index is provided by NAR solely for use as a reference. Resale of any part of this data is prohibited without NAR’s prior written consent. For questions on this report or to purchase the RCI series, please email: Data@realtors.org.

 

[1] In generating the median days on market at the state level, NAR uses data for the last three surveys to have close to 30 observations. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations.

[2] To access Realtor.com data, go to https://www.realtor.com/research/data/.

 

 

Source: NAR Economic Outlook

In a monthly survey of REALTORS®, respondents are asked “In the neighborhood(s) or area(s) where you make the most sales, what are your expectations for residential property prices over the next year?”

 Based on the responses of approximately 3,000 REALTORS® who answered this question in the August 2018 REALTORS® Confidence Index Survey, the median expected price change in the next 12 months nationally is 2.1 percent, a slower price appreciation compared to the 4.0 percent average during the January through May 2018 surveys (2.5 percent in July 2018 and 3.0 percent in August 2017).

The chart below shows the median expected price change across the U.S. states based on the June, July, and August 2018 surveys of REALTORS®.[1] The median expected price growth ranges from no change to five percent across the states.

REALTORS® who responded to the survey expect prices to typically increase in the state at four percent in Idaho, Nevada, Utah, Arizona, Alabama, and Delaware.

Home prices are also expected to appreciate at three to less than four percent in the states of Washington and Colorado, in some Midwest states (South Dakota, Wisconsin, Michigan, Indiana), in some South states (North Carolina, South Carolina, Georgia, Florida, Mississippi), and in the District of Columbia. (Note: this survey was conducted before Hurricane Florence hit the Carolinas).

However, respondents expect prices to typically increase by less than two percent in California, Texas, Massachusetts, among others. In Connecticut, the median expected price change is zero percent.

Home prices have started dropping, although modestly in some areas. Based on the FHFA Home Price Index (Purchase Only Index, seasonally adjusted), home prices fell in the second quarter of 2018 compared to 2018 Q1 in high price areas such as Urban Honolulu (-6.3%), San Jose-Sunnyvale-Sta. Clara (-0.4%), Washington-Arlington-Alexandria (-0.2%), Silver-Spring-Frederick-Rockville. MD (-2.1%), and Hartford-West Hartford, CT (-1.0%).

Prices increased only modestly In Los Angeles-Long Beach-Glendale, (0.1%), as well as in Seattle-Bellevue-Everett, WA (0.2%).

Prices still rose strongly in areas such as San Francisco -Redwood City-South-San Francisco, Las Vegas-Henderson-Paradise (4.2%), and Boise, ID (4.6%), among others.

Solid employment growth and tight supply is still bolstering home prices in many areas, but the price appreciation is moderating (and prices are falling in some areas), which should make home prices more affordable for homebuyers.

Use the data visualization tool below to explore how prices changed across the top 100 metros as of 2018 Q2.

 

var divElement = document.getElementById('viz1538080177648'); var vizElement = divElement.getElementsByTagName('object')[0]; vizElement.style.width='560px';vizElement.style.height='987px'; var scriptElement = document.createElement('script'); scriptElement.src = 'https://public.tableau.com/javascripts/api/viz_v1.js'; vizElement.parentNode.insertBefore(scriptElement, vizElement);

 

About the Realtors® Confidence Index Survey

The RCI Survey gathers information from REALTORS® about local market conditions based on their client interactions and the characteristics of their most recent sales for the month. The August 2018 survey was sent to 50,000 REALTORS® who were selected from NAR’s1.3 million members through simple random sampling and to 8,386 respondents in the previous three surveys who provided their email addresses. There were 4,639 respondents to the online survey which ran from September 1-11, 2018. NAR weights the responses by a factor that aligns the sample distribution of responses to the distribution of NAR membership. The REALTORS® Confidence Index is provided by NAR solely for use as a reference. Resale of any part of this data is prohibited without NAR’s prior written consent. For questions on this report or to purchase the RCI series, please email: Data@realtors.org.

 

---

[1] In generating the indices, NAR uses data for the last three surveys to have close to 30 observations. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations.

Source: NAR Economic Outlook

With rates rising and home price growth starting to slow, I started to consider how much income is used towards housing in this current economic climate. Mortgage rates are trending upwards to near the highs of 2011 at 4.98 percent, home prices are still rising but at a slower pace, and the median income has been steadily rising although an even more modest pace than house prices. These factors go into how much of a person’s income goes towards housing expenditures and whether housing is a burden for potential homebuyers. This blog will highlight some of the factors and show states and regions where housing is less of a financial burden.

Home Price vs Median Family Incomes

Home prices since 2000 started to outpace incomes but started to turn towards the end of 2007, until home prices plummeted during the Great Recession. In 2008, incomes grew making it favorable for potential homeowners to buy a home. It took home prices about 4 years to recover, beginning in 2012. Around 2014 home price growth began to bloom and once again, prices started to outpace incomes. This pace has continued until recently, as home price growth has slowed making owning a home affordable. As of the second quarter of 2018, family incomes have increased by 52 percent since 2000, while housing prices have increased by 95 percent, or nearly doubled the level in 2000.

Payment to Income and Mortgage Rates

Let us look at the amount of money homeowners had to commit from their income to be able to afford a home. In 2000, when interest rates were 7.90 percent, homeowners had to spend about 19.6 percent of their income to be able to afford a home. In 2006 when rates were around 6.50 percent, homeowners had to spend 22 and up to 24 percent of their income on a home. In the wake of the Great Recession in 2009-2010, mortgage rates started to fall, so the share of income that went to paying a mortgage declined. In 2013 when rates were down to 3.47 percent, the mortgage payment on a median priced home was 11 percent of the median family income, putting less pressure on household incomes. Since that time rates have continued to decline, much to the benefit of potential homeowners. Anything above 30 percent is considered burdensome on households, but below that range would be typically affordable. On a regional level, the West requires a higher portion of your income, which has eclipsed the 35 percent mark. The Midwest, being the most affordable region, requires the least percentage of median family incomes. The Midwest started around 15 percent and, at times, dipped below 10 percent and is currently hovering back around 15 percent.

Payment to Income Ratio

A ratio between 2.5 and 4 is normal and healthy price to income ratio for the housing market. As of August 2018, the median price of existing homes sold was 3.5 percent of the median family income. The Harvard University Joint Center for Housing Studies (JCHS) produced a map showing the US home price to income ratios. The ratios range from under two to over eight. As the map below illustrates, costal markets have much higher ratios, indicating significantly higher home prices compared with incomes. The West Coast region has affordability issues, with several areas posting ratios above eight, including San Diego, Los Angeles and the San Francisco metropolitan area. Small pockets in the Northeast reach above five, mostly clustered around New York City and Boston. The Miami/ South Florida Region also posts low affordability. In comparison, The Midwest region has ratios in the 2-3 range, in line with historical averages.

Jobs Generated vs GDP Growth Rate

The Gross domestic product (GDP) has hovered around 3 percent and has had to withstand the tech bubble, wars and several crises. In 2009, both jobs and GDP took a dive but rebounded the following year. GDP and jobs have grown solidly after the Great Recession. Unemployment has been below 6 percent ever since 2014, which is good for economic progress and potential homebuyers.

Even with rising rates and higher home prices, potential homebuyers have plenty of reason to join the market. Real Estate is still affordable in several states and regions. The job market is strong, GDP is at a healthy level and consumer confidence is high. New homes and existing inventory figures are now improving, although still modestly, but the increase in inventory is helping tame price growth.

Source: NAR Economic Outlook

In a monthly survey of REALTORS®, respondents are asked “Compared to the same month last year, how would you rate the past month’s traffic in neighborhood(s) or area(s) where you make most of your sales?” Respondents rate seller traffic as “Stronger” (100), “Stable” (50), or “Weaker” (0) and the responses are compiled into a diffusion index. An index greater than 50 means that more respondents reported “stronger” than “weaker” conditions.

REALTORS® reported slower homebuying activity in July 2018, according to the  July 2018 REALTORS® Confidence Index Survey. The REALTORS® Buyer Traffic Index registered at 62, down from the same month one year ago (69). This is the fifth straight month (since March 2018) that Realtors® reported a decline in buyer activity compared to conditions one year ago. The decline in the REALTORS® Buyer Traffic Index mirrors the trend in NAR’s tally of existing home sales that showed a year-over-year decline in sales since March 2018.

NAR also asks REALTORS® about current market conditions and the outlook in the next six months in the single-family homes market. Both the REALTORS® Confidence Index: Single-family Current Conditions and the REALTORS® Confidence Index: Single-family 6-Month Outlook also declined compared to one year ago.

The indices are still all above 50, which means that there are more respondents who reported a stronger than a weaker market for the reference month compared to conditions one year ago. However, a lower index means a smaller fraction of respondents reported a stronger market (than a weaker market) in their business area.

The increase in the mortgage rates and higher home prices since January 2018, have combined to make a home purchase less affordable. Freddie Mac’s contract 30-year fixed mortgage rate rose from an average of 4.03 percent in January to a peak of 4.59 percent in May 2018 and stood at 4.53 percent in July 2018, while the median price of existing homes rose from $240,800 in January 2018 and peaked to $273,800 in June 2018, then slid slightly to $269,600 in July.

Assuming a 10 percent down payment[1], the monthly mortgage rose from $1,030 in January 2018 to $1,233 in July 2018 (increase of $233/month). The mortgage payment is still affordable —at 15 percent of the estimated household income of a 2-wage earner family (933/week/earner)—but this is slightly up from 13 percent in January 2018. Households whose housing expense make up more than 30 percent of income are considered cost-burdened.[2]

Mortgage rates eased somewhat in July 2018, to 4.53 percent, from a peak of 4.59 in May 2018, while the median price of an existing home also decreased to $ 269,600 from $273,800 in June 2018, leading to a slight decrease in mortgage payment in July 2018 from June 2018.

With the unemployment rate at 3.9 percent and core inflation at 2.4 percent in July 2018, the expectation is a continued gradual increase in the federal funds rate, which will also bump up mortgage rates. NAR Chief Economist forecast the 30-year mortgage rate to average 4.6 percent in 2018 and 5.1 percent in 2019.

Estimate of Impact of Higher Mortgage Rate on Existing Home Sales

Higher mortgage rates tend to dampen home sales, as shown during the period when mortgage rates rose in mid-2013 (‘taper tantrum’ period) and starting in the fourth quarter of 2016 as the Federal Operations Market Committee embarked on a gradual increase in the federal funds rate in line with its mandate to foster growth and to keep inflation near two percent. Home sales have remained essentially flat since the fourth quarter of 2016 given the series of gradual rate increases.

De Fusco and Paciorek (2014) estimated that a one percentage point increase in mortgage rates decreases mortgage demand by 2.5 percent.[3] Using this elasticity, I estimated that the 72 basis point increase in 30-year fixed rate mortgage in September 2017 and July 2018 reduced existing home sales by an annualized rate of 100,000 units (from 5.37 million to 5.27 million annualized sales).  The seasonally adjusted annual home sales in July 2018 was 5.34 million. The unexplained difference (5.34 million less 5.27 million) may be due to other factors that boosted demand, such as an increase in employment.

---

[1] The median amount financed is 90 percent, according to NAR’s 2017 Home Buyers and Sellers Report; https://www.nar.realtor/sites/default/files/documents/2017-profile-of-home-buyers-and-sellers-11-20-2017.pdf

[2] HUD, Rental Burdens: Rethinking Affordability Measures, https://www.huduser.gov/portal/pdredge/pdr_edge_featd_article_092214.html

[3] De Fusco and Paciorek, The Interest Rate Elasticity of Mortgage Demand: Evident from Bunching at the Conforming Loan Limit, https://www.federalreserve.gov/pubs/feds/2014/201411/201411pap.pdf

Source: NAR Economic Outlook

• NAR released a summary of pending home sales data showing that July’s pending home sales pace was down 0.7 percent last month and fell 2.3 percent from a year ago.
• Pending sales represent homes that have a signed contract to purchase on them but have yet to close. They tend to lead existing-home sales data by 1 to 2 months.
• All four regions showed declines from a year ago. The South had the smallest dip in pending sales of 0.9 percent. The West had the biggest drop in sales of 5.8 percent. The Northeast fell 2.3 percent followed by the Midwest with a decline of 1.5 percent.
• From last month, two of the four regions showed inclines in sales. The Midwest region had the smallest gain of 0.3 percent followed by the Northeast, which rose 1.0 percent. The South had a decline of 1.7 percent followed by the West with a drop of 0.9 percent.
• The U.S. pending home sales index level for the month was 106.2. June’s data was revised up to 107.0.

• In spite of the decline, this is the pending index’s 51st consecutive month over the 100 level.
• The 100 level is based on a 2001 benchmark and is consistent with a healthy market and existing-home sales above the 5 million mark.

Source: NAR Economic Outlook

Amid tight supply, home prices are still increasing although at a slower pace. Nationally, the median price of existing homes sold in July 2018 rose to $269,600, up 4.5% from one year ago, but slower than the 5.7% appreciation in 2017.

As another indicator, the median list prices of homes listed on Realtor.com increased in 405 out of 500 metro areas on a year-on-year basis, fewer than the 423 metro areas in July 2017. The number of metro areas with higher year-on-year median list price has been trending down since March 2018 (except in June).

The table below shows the change in median list price on Realtor.com in July 2018 compared to one year ago. Among the largest metro areas, the median list prices declined in July 2018 from one year ago in Washington-Arlington-Alexandria, DC-VA-MD-WV (-1.6%), Denver-Aurora-Lakewood, CO (-8.8%), Austin, Round Rock, TX (-3.3%), Greenville-Andersen-Mauldin, SC

(-1.1%), Urban Honolulu, HI (-0.6%), and Cape Coral-Fort Myers FL (-3.2%). Several metro areas in California also had year-on-year declines: Salinas, Sta. Maria-Sta. Barbara, Madera, Truckee-Grass Valley, and Eureka-Arcata-Fortuna.

However, the median list price continues to increase on a year-on-year basis in the high-cost metro areas of California such as Los Angeles-Long Beach-Anaheim (4.3%), San Francisco-Oakland-Hayward (5.7%), San Jose-Sunnyvale, CA (16.5%). The median list price also rose in New York-Newark-Jersey City (11.5%), Atlanta-Sandy Springs, GA (10.3%), and Seattle-Tacoma-Bellevue, WA (14.4%).

Scroll down the data visualization table below or type in a specific metro area name in the box.

var divElement = document.getElementById('viz1535651581551'); var vizElement = divElement.getElementsByTagName('object')[0]; vizElement.style.width='560px';vizElement.style.height='787px'; var scriptElement = document.createElement('script'); scriptElement.src = 'https://public.tableau.com/javascripts/api/viz_v1.js'; vizElement.parentNode.insertBefore(scriptElement, vizElement);

The map below shows where median list prices on Realtor.com declined in July 2018 compared to one year ago (blue areas on the map). Scroll down the table or hover over the map to view the historical median list price trend.

var divElement = document.getElementById('viz1535651602156'); var vizElement = divElement.getElementsByTagName('object')[0]; vizElement.style.width='560px';vizElement.style.height='927px'; var scriptElement = document.createElement('script'); scriptElement.src = 'https://public.tableau.com/javascripts/api/viz_v1.js'; vizElement.parentNode.insertBefore(scriptElement, vizElement);

Tight inventory continues to push up prices of existing homes for sale, although at a moderate pace compared to past years. Nationally, the median price of existing homes sold in July 2018 rose to $269,600, up 4.5% from one year ago (vs. 5.7% appreciation in 2017). Adjusted for inflation, home prices rose 1.5 percent. As of July 2018, the nominal median home price ($269,600) is 17% higher than the bubble-era peak price ($230,400), but the inflation-adjusted price ($184,222) is still 6% below the corresponding inflation-adjusted price of the nominal peak level ($194,963).

 

 

Source: NAR Economic Outlook

Home price appreciation is an important topic in today’s economy. Using data from the American Community Survey (ACS), we can analyze the gains and losses of property values over time. I estimated the median property values by state in 2017 using the FHFA index and the median property values from the (ACS). I then calculated the growth rate from 2005 -2017. [1]

The states with the highest estimated median property values in 2017 are Hawaii ($637,892), District of Columbia ($605,756), California ($522,431), Massachusetts ($396,992), and Colorado ($342,967).

The states with the lowest estimated median property values in 2017 are Alabama ($141,714), Oklahoma ($137,387), Arkansas ($129,902), West Virginia ($122,791) and Mississippi ($118,019).

On a regional level, the estimated price growth appears to be the strongest in the South, West, and Midwest. Price growth is weakest in the Northeast states. Overall, all regions are displaying growth in property values with only a few states showing no growth or loses. Below is a breakdown of the Census four regions by state.

• In the South, which typically leads all regions in sales, Texas led the region with 63 percent estimated price growth from 2005 to 2017. Although Florida experienced strong price growth since 2012, home prices have only increased by 14 percent since 2005 when house prices were still generally at peak levels.

• In the West, the least affordable region [2], Montana led all states with 71 percent price growth from 2005 to 2017. Despite the strong price growth in California since 2012, prices have only increased by 9 percent since 2005. Nevada shows a negative 5 percent price change over this time.

• In the Midwest where affordability is most favorable, North Dakota led all states with 111 percent price growth from 2005 to 2017. The increase is likely due to the boom in shale oil production up until 2014 when oil prices started collapsing. Illinois, while having the smallest growth in the region had an estimated 7 percent price growth over this time.

• In the Northeast where price growth is typically slow, Pennsylvania lead the region with a 40 percent price growth from 2005 to 2017. Rhode Island was the only state to have a decline of negative 4 percent price change over this time.

---

[1] I used the FHFA expanded data set, not seasonally adjusted data.

[2] Based on NAR housing affordability index

Source: NAR Economic Outlook

In the monthly REALTORS® Confidence Index Survey, the National Association of REALTORS® asks members “In the neighborhood or area where you make most of your sales, what are your expectations for residential property prices over the next year?”

Among the REALTOR® respondents who responded to the January 2018 survey, the median expected price change for the next 12 months was 3.6 percent, according to the  January 2018 REALTORS® Confidence Index Survey.[1] In December 2017, the median expected price change was 3.1 percent. Strong buyer traffic amid low supply of homes coming into the market continues to push up home prices. In January 2018, the median price of existing homes sold rose to $240,500, up six percent from one year ago.

The map below shows the median expected price change of the respondents in the next 12 months at the state level based on surveys conducted during November 2017—January 2018. The highest median expected price growth of more than five to seven percent was in Washington, Nevada, and Wyoming.

In Oregon, Idaho, Utah, Arizona, Colorado, and Florida, the median expected price growth was four to five percent. REALTORS® reported stronger buyer traffic in these states compared to one year ago, based on the RCI Buyer Traffic Index, while the number of homes for sale has remained essentially unchanged, based on the RCI Seller Traffic Index.

In states with high property tax rates or property prices, such as New York, New Jersey, Connecticut, and California—states which are the most affected by the Tax Cuts and Jobs Act that put a cap on total itemized deductions property and state and local taxes — the median expected price change among respondents was two to three percent.[2]

Lack of supply amid strong buyer interest continues to push prices up. At the metro area level, data on the number of active listings on Realtor.com indicates how serious the lack of supply is. Of the 500 metro areas tracked by Realtor.com, active listings are lower compared to one year ago in 395 out of 500 metro/micro areas, 80 percent. Areas in red show active listings are lower compared to one year ago, while areas in blue have more active listings.

Source: NAR Economic Outlook

In a monthly survey of REALTORS®, respondents are asked “Compared to the same month last year, how would you rate the past month’s traffic in neighborhood(s) or area(s) where you make most of your sales?” Respondents rate buyer traffic as “Stronger” (100), “Stable” (50), or “Weaker” (0) and the responses are compiled into a diffusion index. An index greater than 50 means that more respondents reported “stronger” than “weaker” conditions.

The chart below shows buyer traffic conditions in November 2017–January 2018 compared to conditions one year ago, according to the  January 2018 REALTORS® Confidence Index Survey.  Except in two states, REALTORS® reported that buyer conditions were “stable” (unchanged) to “very strong” compared to conditions one year ago, including in the District of Columbia (unchanged).[1]  The states with the strongest buyer traffic are Washington, Idaho, Nevada, and Utah. Respondents from Texas and Florida, states which were hit by hurricanes Harvey and Irma, generally reported “strong” buying activity compared to one year ago. On the other hand, REALTOR® respondents from Alaska and West Virginia respondents generally reported “weak” buyer traffic compared to one year ago, and this may be related to the effect of the slump in oil prices since 2015, though oil prices have started to firm up again in 2017 as OPEC cut its oil production.

In contrast, only five states have “strong” supply conditions in November 2017–January 2018 compared to one year ago: Alaska, North Dakota, Nevada, Rhode Island. and Utah. In many states, seller conditions have remained “stable” compared to one year ago, which means that the level of supply has not changed compared to one year, even if demand has been increasing. In 22 states, supply conditions are “weak” compared to one year ago.

At the metro area level, data on the number of active listings on Realtor.com indicates how serious the lack of supply is. Of the 500 metro areas tracked by Realtor.com, active listings are lower compared to one year ago in 395 out of 500 metro/micro areas, 80 percent. Areas in red show active listings are lower compared to one year ago, while areas in blue have more active listings.

Nationally, the REALTORS® Buyer Traffic Index registered at 69 (66 in December 2017; 63 in January 2017), while the REALTORS® Seller Traffic Index was at 44 (47 in December 2017; 41 in January 2017). An index above 50 indicates that more respondents reported stronger than weaker conditions compared to one year ago, so the data indicates that homebuying demand continues to outpace supply.

Source: NAR Economic Outlook